The Public Option

Digital monopolies are killing local news. Is public funding the only way to save it?

I. They Came All the Way from Tokyo

Although the front page of the Warroad Pioneer rarely featured a story bigger than one involving the local high school or city government, in May 2019, the newspaper itself was the news. After 121 years of serving Warroad, Minnesota, a small city near the Canadian border, the next day would be its final edition. On hand to record the event were not only national reporters from New York and Atlanta, but also a documentary crew from the Tokyo Broadcasting System. With cameras rolling, the three-person staff clinked Bloody Marys at 10am to soften the hard emotions of the final day.

And, then, they got to work.

According to owner and publisher Rebecca Colden, : declining readership in the face of digital competition and declining revenue as ad dollars shifted online. In 2008, when Colden purchased the paper, circulation was 2,700 and revenues around $200,000. However, by 2019, circulation was barely above a thousand and revenues a fraction of that peak. Members of the staff would occasionally not cash their paychecks to help keep a dire situation from turning bleak. But such heroism could only sustain things so long.

That the closing of the Pioneer made news in Tokyo wasn’t only surprising because of the paper’s small size. It was surprising because the demise of an America small town papers is hardly a rare event. More than 1,800 mastheads have closed over the past 14 years. , while half of all counties now only have a single publication, which is often a weekly. Among those papers that remain open, .On top of this, . While national outlets like the New York Times, Wall Street Journal, and Washington Post are achieving modest success with digital subscription models, for local papers there’s no obvious way out of the death spiral. The audience for local news is inherently small, making it nearly impossible to monetize profitably.

I was first drawn to this topic early last year, while working on an article about my local hometown, Peekskill, New York. After over two decades of efforts to turn around the blighted downtown, those efforts are finally bearing fruit. The article recounted the fall and subsequent rise of the city and heralded the sense of community that is accompanying the rebirth. When I submitted the piece to the Journal News, the local paper owned by Gannett, however, I couldn’t get a response. Emails and calls went unanswered for weeks. Finally, I got one of the veterans of their editorial board on the line. After yet another round of downsizing, I learned that an editor another Gannett-owned paper fifty miles away in New Jersey was now overseeing local submissions. Ultimately, . Still, I wondered: how well could even a capable editor who’s not even in the same state understand the local context?

Such concerns aren’t merely sentimental. The decline of local news isn’t like the decline of other industries and institutions rendered irrelevant by technological and social change. Writing of newspapers in the early American republic, that newspapers are how people in a democracy “converse every day without seeing one another,” and “take steps in common without having met.” Considered this way, the loss of local newspapers isn’t like the loss of telegrams, milk deliveries, attendance at Friday night football games, or other venerable small town customs. The death of local newspapers means the snuffing out of local civic discourse, and with it, a key means by which communities become communities and ensure effective self-governance. Reinforcing this point, show that a decline in local news is often associated with less-informed voters, less-engaged local politicians, fewer people running for public office, lower voter turnout, and less efficient government finances. Local news isn’t a product like any others; it’s an essential public good — thereby making the production of it an essential public service.

In 2016, eight hours due south of Warroad, Minnesota, this was on vivid display in Storm Lake, Iowa, another small city, where so far the local paper is still holding on. That year, the local water utility sued county officials for failing to enforce regulations aimed at keeping agricultural pollution out of local water sources. It was only due to the dogged reporting by the Storm Lake Times that the city residents learned that the city’s legal defense was being funded by the same agricultural groups responsible for the pollution. It was a case of naked corruption.

Although a judge ultimately dismissed the water utility’s lawsuit on a technicality, the Times’ muckraking was nonetheless instrumental in keeping local officials focused on cleaning up Storm Lake — and in 2017, . “Storm Lake’s water quality has not been better in our lifetime,” publisher in a recent editorial summarizing how, despite occasional setbacks such as the lawsuit’s dismissal, the strong focus by local officials from both parties led to a new lease on life for the lake. “In Storm Lake, there were no sides. We had a failing lake that required urgent attention. The people demanded action and got it.” According to Cullen, it was the concerted efforts of both Republican and Democratic officials at the state and local level, plus the involvement of local residents who helped sustain the momentum necessary to clean up the watershed. What he humbly didn’t mention was his paper’s role in giving the public a common source of information and holding local officials accountable for progress.

What shape would Storm Lake be in if not for the Storm Lake Times?

II. The Revolution That Wasn’t

In the 1990s, during the early days of the Internet, techno-utopists predicted a different future for journalism. The web, which let anyone with a modem and keyboard become their own publisher and polemicist, was supposed to democratize information, give rise to a new breed of “citizen journalists,” and produce a flowering of hyper-local information. “[Citizen Journalists] may help spark a renaissance of the notion, now threatened, of a truly informed citizenry,” author and journalist Dan Gilmor wrote in the early 2000s. They “will give new voice to people who’ve felt voiceless — and whose words we need to hear.” In 2002, author : “Weblogging will drive a powerful new form of amateur journalism as millions of Net users — young people especially — take on the role of columnist, reporter, analyst, and publisher while fashioning their own personal broadcasting networks.” By 2004, as “a publishing revolution more profound than anything since the printing press.”

In retrospect, it’s easy to see why such optimism prevailed. In 1999, when dot com pioneer Evan Williams launched, By 2004, when he sold Blogger to Google and moved on to start Twitter with Jack Dorsey, millions had embraced the medium. Part of what made blogging infectious was not only how easy it was for writers to broadcast ideas and find an audience; it was the decentralized nature of the experience. Readers could fall down rabbit holes of links, tracing one blog to another through webs of embedded URLs. A blog about Italian vacations might lead to recipes for pesto, which could link out to someone’s argument about organic farming. The joy was in the discovery. Users were empowered to follow their interests and sites like Blogger made it easy to share their own. The experience was not unlike flipping the pages of a Sunday paper and stumbling on an article you’d never think to read about until the headline caught your eye — except on steroids, and without an editor or publisher determining what’s “news.”

For local newspapers already reeling from the defection of classified ads to Craigslist, however, blogs represented an existential threat. Time spent in the blogosphere was time not spent reading local news. And as readership stagnated, advertising revenues slipped. Signaling the significance of the shift, in 2006, no less venerable a paper than the San Jose Mercury News — Silicon Valley’s newspaper of record — found itself on the sales block because of the industry’s increasingly perilous financial state. , few would have predicted this fate even just a decade earlier.

In the 1990s, many considered the Mercury News the vanguard of digital journalism. In 1993, it was among the first papers in the country to debut a digital edition — “Mercury Center,” a subscription-based service in conjunction with America Online featuring articles, source materials, classified listing, advertising, and more. In 1994, when Netscape launched its Mosaic browser, the Merc quickly embraced the new medium, freeing Mercury Center from its dependence on AOL and making it available to thousands more readers. By 1998, Mercury Center was attracting over a million unique monthly users.

Unfortunately, any sense of victory was fleeting. Despite the size of its audience, Mercury Center was only able to generate a fraction of the revenue per reader that the print edition could. Because of the near-infinite inventory of ad space online, online ads could only be sold for a fraction of the price of those in print. For this reason, calls to long-time advertisers for the print edition increasingly faced the restive response that print advertising wasn’t as effective as it used to be — and this wasn’t just true at the Merc. Across KnightRidder, the Mercury News’ parent company, venerable mastheads were struggling. In 2005, print advertising revenues were down 5% across the company compared to 2000. After attempts to replicate the Mercury Center model across KnightRidder failed, in 2006, the company sold itself to McClatchy, and the Mercury News spun out. Four months later, the Merc announced it was laying off 101 people, including 40 in the newsroom. The blogosphere had won.

Dan Gilmor, the citizen journalist acolyte, who, incidentally, was also the tech columnist for the Mercury News, was incensed. “One of the most amusing PR foibles of newspapers, in a sick sort of way, has been the way they’ve explained their persistent downsizing as being good for readers, or at least not bad,” he steamed. “As I write this, scores of employees at the San Jose Mercury News … are sitting by their phones at home. They’re waiting to learn, as pre-announced layoffs loom, whether they still have jobs.” But if he had any better ideas to stop the bleeding — or if he even appreciated the irony that the bleeding was partly a consequence of the same blogging revolution he heralded — he didn’t say.

Then for local news, things got even worse.

III. The Digital Duopoly

At the same time the Mercury News was going through upheaval, 20 miles up Route 101 in Palo Alto, California, Facebook was planning disruption of a different kind — one that would spell an end to the age of the freewheeling blogosphere, the beginning of today’s digital advertising duopoly, and an acceleration of all the trends that led to the Mercury News’ sale.

In September 2006, Facebook reoriented its entire site around the News Feed, or as Mark Zuckerberg would later call it, “.” Unlike the cluttered blogosphere, News Feed made it easy to discover, disseminate, and self-publish content. Despite an initial outcry from users concerned about Facebook’s cavalier attitude towards user privacy in making the change, (Zuckerberg’s mea culpa for catching users off-guard came in a post titled “Relax. Breathe. We Hear you.”), millions soon embraced the new format and the sites’ popularity continued to soar. A year after News Feed debuted, Facebook had worldwide.

It’s hard to understate the significance of News Feed structurally for the Web and, by direct extension, the financial viability of local news. Before Facebook introduced News Feed, content discovery was still largely up to users — you could fall down that rabbit hole of links. Although Google might influence the search results you saw, users still dictated what type of information they were seeking out. News Feed, however, marked an important shift: by curating content from across your social network, Facebook dictated what information you saw.

In 2008, when Sheryl Sandberg joined the company as chief operating officer to help the Facebook replicate Google’s success in building an online advertising business, the power of this arrangement was immediately apparent. By allowing brands to place advertising in individuals’ feeds based on data it collected, Facebook could offer advertisers a level of microtargeting that previously they could only dream of. Moreover, it created a structural advantage through network effects. The more time Facebook could get users to spend on the site, the more data Facebook could collect and use to better target content and ads, which would lead users to spend more time on the site — and advertisers to spend more of their ad budgets reaching them. More than a century ago, to monopolize freight transportation. Facebook found a way to replicate the practice digitally — and News Feed was the key.

These network effects had a cascade of consequences for local news. First, it led to a crowding-out of local content. As Facebook and others discovered that listicles, cat memes, and friends’ vacation photos were more likely to increase time spent on the site than stories about who-said-what at the local town meeting, such mindless fluff got greater weighting in the feed than local news.

Second, it made it harder for local papers to build direct relationships with online readers. Since users could now rely on News Feed to tell them what was “important,” they were less likely to seek out digital publications directly. By 2014, , with most of this driven by Facebook. Additionally, as most readers would read only one article then leave the site, this traffic would not lead to strong sales of online subscriptions.

Third, and most importantly, it made it almost impossible for local newspapers to generate meaningful revenue from advertising online. If they were already forced to accept pennies on the dollar per reader (versus print ads) for digital ads, the News Feed’s network effects made advertisers even less likely to seek out the online edition of a local paper. Why put an ad next to the high school basketball scores of say, the Albuquerque Journal to reach mothers with families, when you can surgically target women ages 35–55 who already “like” your brand? Why go through the effort of advertising on the sites of local papers at all, when Facebook and Google already aggregated most of those same audiences for you?

So dramatic were these effects that between 2006 and 2016, newspaper-advertising revenues . Hardest hit were newsrooms, which lost to layoffs and forced retirements over the same period. Facebook, of course, thrived, capturing more than 20% of the global digital advertising market, and nearly . Coupled with , the two were a certifiable duopoly.

In January 2019, responding to criticism that Facebook was snuffing out local news, the company launched a local news initiative and pledged $300 million to get local journalists to produce content for the platform. Then, in October, they announced that the company would pay publications to feature their articles in a new “News Tab.” Both initiatives were welcome, but there were problems. With respect to the News Tab, the new revenue would hardly offset the billions siphoned from local papers over the past ten years. And when it came to the local news initiative, in a third of U.S. markets, . Where journalists did remain, there often weren’t enough to provide the level of oversight necessary to hold local government to account.

Proving the point: in Waynesville, Missouri, a small city nestled in the Ozarks, all that remains of the local press is Darrell Todd Maurina. After the Waynesville Daily Guide ceased publication in 2018, Maurina took it upon himself to carry the local journalism torch. He’s now a staple at town meetings, where he sits behind his laptop, an ear bud playing the police scanner in his ear, tapping out summaries of the proceedings. He publishes his reporting directly to Facebook as the , which has more than 16,000 followers. “[As] newspapers wither and die … somebody needs to pick up the slack,” . “At least in this community, I’m able to do that.”

Despite Maurina’s best efforts, however, most agree it’s not enough. According to the local police chief, the community is struggling with a major drug problem. There were four drug-related homicides last year. But without a local paper and core of journalists able to dig into the issue, few realize the extent of the problem. News about upcoming events — store closings, town picnics, school plays, and more — most learn about after-the-fact through social media posts. “Candidly, for the most part, I’m ignorant,” Bill Salsbaugh, a retiree and resident, likewise . “I miss the newspaper, the chance to sit down over a cup of coffee and … find out what’s going on in the community.” Added resident Keith Pritchard, “Losing a newspaper is like losing the heartbeat of a town.”

IV. The Fixes That Fail

I was 11 years old when my hometown lost its heartbeat. In 1998, the Peekskill Evening Star, which for 63 years covered the local comings and goings of Peekskill, New York, consolidated into an agglomeration of Gannett papers across the lower Hudson Valley. Going forward the only local daily would be the regionally-focused Journal News.

The demise of the Evening Star coincided with a deterioration of the town, a small city at the bend in the Hudson River about an hour north of Manhattan. After years of industrial decline, by the 1990s, when I was growing up, downtown Peekskill was a shell of its former self. Blighted storefronts lined streets that a generation earlier were bustling with shoppers. While the hollowing out may not have been as extreme as that witnessed by cities in the Rust Belt, Peekskill was nonetheless subject to the same decline in community life that Robert Putnam chronicled in his bestseller, Bowling Alone. Between 1986 and 2015, following the Evening Star’s sale to Gannett, its former granite-faced headquarters went through a series of owners as if unwanted, while slowly falling into disrepair. It was an apt metaphor for the plight of the town.

In retrospect, however, we were lucky. The Journal News still dedicated reporters to the Peekskill beat. But, as longtime area newspaperman and local historian Jeff Canning remembers, it wasn’t the same. “It evolved into almost ‘hit and run journalism,’” says Canning. Instead of say, five reporters dedicated to the town, talking to people, finding stories, covering local municipal meetings, and holding local leaders accountable, after the loss of the Evening Star, reporters might only be present for big stories or events. It was a far cry from a generation earlier, when towering local editors like William Cannon of the nearby Tarrytown Daily News (also since consolidated) believed in putting out a local paper with “as many local names as possible” and editorials that set the community agenda. “He believed the paper should be a focal point for community growth,” says Canning, adding that today, by contrast, “You can’t be the focal point if you’re not there.” The loss of local news has real consequences, he argues. “This isn’t only bad for newspapers; it’s also very bad for the community itself, because an informed community is a better community. There’s more accountability in city hall, in the school administration building, on your assorted municipal boards, and in the police department when you have someone sitting there every day saying, ‘let me see the blotter, let me see what you got.’”

Canning’s critique gets to the heart of why losing local journalism is something that should worry us. It’s not just about an antiquated technology or business model being replaced by something new. This isn’t the steam engine giving rise to the combustible engine. With the loss of local journalism, we’re losing an integral part of community life. And, despite years of kvetching by tech luminaries and news industry veterans that local journalism just “,” it’s becoming increasingly clear that a better business model doesn’t exist. . Digital advertising can’t produce the revenue that print advertising once could. And local towns often don’t have the critical mass of willing or able subscribers to support a high-quality newsroom. So what can we do?

Over the past ten years, a few promising models have begun to emerge. The most obvious is charging for content online. In 2011, the New York Times upended years of conventional wisdom that readers wouldn’t pay for online access by introducing a paywall. Almost a decade later, the Times has nearly , and for almost all legacy papers.

Beyond paywalls, another promising model is billionaire largesse. In 2013, Jeff Bezos bought the Washington Post, giving it the financial backing necessary to make much-needed investments in its tech stack and newsroom. Since Bezos’s acquisition, d and the paper has returned to profitability. In 2018, billionaire biotech investor Patrick Soon-Shiong bought the Los Angeles Times, hoping to bring about a similar transformation.

“Digital first” publications like BuzzFeed, Vox and Patch have also emerged. Freed of print publications’ legacy cost structures and adroit at leveraging social media for readership, Vox and Buzzfeed have succeeded in building meaningful readership and recognized brands. Patch — a local news platform — is finding success by monetizing not only display advertising, but also real estate ads.

The not-for-profit ProPublica offers yet another model. Relying on the backing of major philanthropies like the MacArthur Foundation and Pew Charitable Trust, the paper has built a reputable newsroom focused on investigative reporting, and over the past ten years has won . It’s also now backing local journalists with one-year fellowships that chosen journalists can use to cover local investigative reporting. As of July 2019, 20 reporters were in the program nationwide.

All of these models have merits, but most also have serious drawbacks. While online subscriptions represent a vital new revenue source, they are hardly enough to offset the decline of print advertising dollars. Moreover, as , “You can’t expect people to subscribe to their local paper (which is vital to democracy, we tell them) AND The New York Times and the Washington Post … AND Netflix AND Hulu AND HBO Go … You get the idea.” Further, data suggest that when readers must choose between national outlets and local, national typically wins out, suggesting that

The billionaire-to-the-rescue model, meanwhile, may seem like a compelling way to give local and regional papers a fighting chance. Unfortunately, more places need help than there are plutocrats willing to give support. Moreover, it creates potential conflicts of interest. What’s the likelihood of a paper investigating misdeeds by the company of its owner?

The difficulty with the digital-first model is that it’s hard enough to make financially viable even with a broad national audience. Vox and BuzzFeed have both routinely missed revenue targets, and in 2018, BuzzFeed laid off 20 percent of its staff. Applying these business models on a local or regional level would be even harder; the addressable audience isn’t big enough to generate the advertising revenue necessary to support quality local coverage. Patch, the local news platform, proves the point: it has for every ten communities it covers.

ProPublica and not-for-profits have done incredible things. But without the ability to generate profits, it’s hard to see how such models can ever meaningfully grow to fill the void. ProPublica’s local news initiative is terrific. However, to date, it only supports 20 reporters nationwide. That hardly makes up for the tens-of-thousands of local reporters lost over the past fifteen years.

The lack of easy answers suggests that maybe what we need is a different approach. Maybe it’s time to start seriously considering government support for local news.

V. The Public Option

The idea of government support for local journalism isn’t without precedent. The federal government has long played a role in ensuring a vibrant marketplace of ideas. From 1792 to the 1970s, the government heavily subsidized distribution of periodicals. . (They unfortunately eliminated this latter requirement, called the ‘Fairness Doctrine,’ in the 1980s). In 1967, Congress passed, and Lyndon Johnson signed the Public Broadcasting Act, which set up the Corporation for Public Broadcasting, laying the groundwork for PBS and NPR to bring educational content to millions of Americans. Then in 1970, Congress passed the Newspaper Preservation Act, which allowed local papers to share print operations, lowering costs.

Implicit in these policies was a recognition that for democracy to function, citizens need to be well informed — and consequently, sometimes government needs actively to foster public discourse. Although support for government involvement in the media market waned beginning in the 1980s as a libertarian ethos took hold, and a bipartisan consensus emerged that the best way for the government to promote public discourse was to stay out of it, this is no longer a luxury we can afford. With respect to local news, either we can let this vital public good continue to wither away or we can choose to save it.

On a national level, the cost wouldn’t be prohibitive. A program robust enough to support 28,000 reporters — the number of newsroom employees lost since 2008 — could cost less than $5 per person per year. If Facebook and Google chipped in a share of the combined $50 billion in profits they make annually, the cost could per person could be even less. We could ensure journalistic independence by distributing these funds to accredited local news organizations based on a transparent formula, for example, number of people living in the coverage area. This could become part of the remit for an expanded Corporation for Public Broadcasting, perhaps rechristened as the Corporation for Public Media. In addition, , we might consider allocating funds to bona fide investigative journalists through a program modeled on the National Endowment for the Arts. New Jersey recently took tentative steps in these directions by — hardly enough, but a start. Facebook’s decision to pay news organizations for content hosted on its new news tab is likewise a welcome start.

Beyond direct funding, we could go further. In areas where genuine news deserts exist, we could create an AmeriCorps for local news. Instead of recruiting recent high school or college graduates, we might consider deputizing qualified recent retirees and charge them with reporting on the comings and goings of the communities they’ve been a part of for most of their adult lives. Communities would benefit from such retirees’ years of local knowledge and relationships, while retirees could enjoy a continued sense of purpose later into life. Moreover, to avoid feeding the Facebook-Google duopoly, public radio affiliates could publish these reports on their websites, much as WNYC is publishing local New York City news through its affiliation with local news site Gothamist. Alternatively, where local outlets still exist, we might offer low interest loans and launch an open-source collaboration to help papers upgrade their tech stacks.

Finally, for such policies to be maximally effective, we should take a hard look at the digital monopolies that are contributing to local news’ annihilation. We might consider using antitrust enforcement to break up the Google-Facebook duopoly in the digital advertising market, and we might explore requiring internet sites like Google News and Apple News that profit from aggregating other news outlets’ stories to share some of those profits. Lastly, similar to the public interest requirement that contributed to the golden age of broadcast journalism from Murrow in the 1950s to Cronkite in the 1970s, we might consider requiring internet platforms above a certain size to dedicate site space to public interest stories from accredited news outlets, with opposing points of view fairly represented.

To be clear, none of these proposals would be a silver bullet. But they would go a long way to staunch the bleeding and give local news a fighting chance.

VI. The Stories We’re Missing

In 2009, Colorado’s Rocky Mountain News bid readers farewell. Founded during the gold rush of 1859 — before Colorado was even a state — after 150 years, the February 27 edition was to be its last. “Goodbye, Colorado,” read the final edition’s front page. “It has been an honor to serve you.” At the state house, the state senate paused its business to lament the loss and applaud veteran reporter, Ed Sealover, who briefly appeared in the chamber. William Singleton, leader of long-time rival the Denver Post similarly doffed his hat, , “The Rocky will forever be remembered for its vital role in the city’s history and the city’s success.” Meanwhile, speaking to NPR at a local bookstore where she was picking up copies of the final edition for her grandkids, longtime reader Sharon Hart , “Part of our history is disappearing — and part of our culture.”

The day before the final edition ran, there were no Bloody Marys, but nonetheless a melancholy mood permeated the newsroom. Publisher and Editor John Temple hugged a photographer as they selected photos for the final edition, while an interactive producer blared an aria from Mozart’s Magic Flute. “It’s hard losing the best job in the world,” longtime photographer Dennis Schroeder from the Associated Press, on hand to record the event.

Among those losing ‘the best job in the world,’ was investigative reporter Laura Frank. In 2018, she told NPR that as she packed up her desk, putting files into boxes, she wasn’t just thinking about her future, . “I had all of these stacks of documents on my desk at the Rocky Mountain News, each representing some issue that I thought needed investigating,” she said.

Over her five years at the paper, Frank had covered some major stories: evasion on the part of federal officials responsible for compensating sick nuclear weapons workers, allegations of academic fraud, in-depth analyses of how the state budget would impact everyday Coloradans, and more. But the story she was working on as the Rocky shut down had the potential to be one of her biggest. Frank had evidence that a Colorado company was sending e-waste to China, where villagers were melting it over open flames to retrieve precious metals, exposing villagers to dangerous rates of lead. She just needed a few more months, a few more sources, and it would be ready for print. She considered passing it to colleagues at the rival Post or another outlet but found they didn’t have resources to dedicate either.

Frank, ever the intrepid reporter, was persistent though. Shortly after the Rocky closed, a $40,000 fellowship to start an investigative news non-profit, the I-News Network, to continue the kind of reporting she led at the Rocky Mountain News. Two years later, after fits and starts, and a lifeline from the non-profit Knight Foundation, I-News was finally on stable footing and Frank was able to finish her e-waste report.

Crucially, in the process she learned that not only was the company potentially poisoning people in China, it was doing the same in Colorado — and state regulators had failed to hold them to account. Had the Rocky not closed, she might have uncovered this shocking finding sooner, to the benefit of area kids susceptible to lead poisoning. What troubled Frank most, however, wasn’t just the two-year delay in uncovering malfeasance with implications for community children; it’s all the other stories going unreported. As she told NPR: What aren’t we learning because of the loss of local news?

It’s a question with urgency for us all.

Photo credit: on

I write about healthcare, social capital and political philosophy in today’s digital economy.

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